University  of  California 


Southern  Regional 


Library  Facility 


UNIVERSITY  OF  CALIFORNIA 
AT   LOS  ANGELES 


GIFT  OF 

CLAF.K   OBSERVATORY 


SIMPLE   MINE   ACCOUNTING 


Published    by  the 

McGraw-Hi!l    Book.  Company 


Successors  to  tKe  E»ook.Departments  of  the 

McGraw  Publishing  Company  Hill  Publishing  Company 

FViblishers  of  Books  for 

Electrical  World  The  Engineering  and  Mining  Journal 

TKe  Engineering  Record  Power  and  The  Engineer 

Electric  Railway  Journal  American   Machinist 


Simple  Mine  Accounting 


BY 

DAVID   WALLACE 

EXPERT  MINE  ACCOUNTANT 


SECOND  EDITION 
WITH  ADDED  MATERIAL 


1909 
McGRAW-HILL   BOOK    COMPANY 

NEW   YORK 


Copyright,  1908,  BY  THE  HILL  PUBLISHING  COMPANY 


ENTERED    AT    STATIONERS'    HALL 


The  Plimpton  Press  Norwood  Mass.  USA. 


2: 

< 


library 


PREFACE 

THIS  book  is  intended  primarily  for  those  who 
have  had  no  opportunity  to  include  among  their 
other  studies  that  of  bookkeeping  —  superintendents, 
mine  foremen,  timekeepers,  etc.,  having  charge  of 
accounts  of  mining  operations;  and,  whilst  mine 
accountants  and  bookkeepers  may  perhaps  find  some- 
thing useful,  the  explanations  and  illustrations  have 
been  simplified  as  much  as  possible  for  the  guidance 
of  those  referred  to.  Local  conditions  vary  con- 
siderably and  no  "hard-and-fast"  rule  should  be 
insisted  upon;  a  little  mental  exercise  on  the  part  of 
the  reader  will  disclose  the  best  method  of  handling 
his  accounts  —  bearing  in  mind  that  accuracy,  sim- 
plicity, and  economy  are  the  chief  desiderata  in  mine 
accounting. 

DAVID  WALLACE. 


2414 3G 


PREFACE  TO   SECOND  EDITION 

IT  is  worth  while  repeating  that,  to  him  who  handles 
cash,  distributes  accounts  or  purchases  supplies  at  a 
mine,  the  objective  point  aimed  at  should  be  to  avoid 
a  loose,  slip-shod,  happy-go-lucky  style  of  doing  busi- 
ness, yet,  at  the  same  time,  dispense  with  too  much 
system  or  "  red  tape." 

The  integrity  of  the  man  is  of  more  importance 
than  so-called  clerical  checks,  however  much  insisted 
upon. 

In  this  second  edition  the  reader  will  find  an  Appen- 
dix, containing  observations  and  forms  relating  to  the 
Card  System  for  warehouse,  shipping  documents  and 
summarized  sheets  of  costs  and  profits,  which  may  be 
amended  or  amplified  to  suit  individual  requirements. 

DAVID  WALLACE. 


VI 


SIMPLE  MINE  ACCOUNTING 

FOB  the  sake  of  brevity  we  will  suppose  that  a 
company  has  been  formed  in  Boston,  called  the  Federal 
Mining  Company,  which  has  acquired  some  properties 
in  Old  Mexico  with  the  intention  of  developing  and, 
if  found  a  paying  proposition,  operating  same.  In 
answer  to  an  advertisement  in  a  Mining  Journal  for 
a  young  graduate  who  understands  surveying  and 
assaying,  one  of  the  applicants  is  appointed  to  go 
down  and  take  charge  of  the  property.  Everything 
is  strange,  language,  customs,  habits,  climate,  etc. 
(Old  Mexico  is  chosen  simply  as  an  example,  with  the 
view  of  making  our  remarks  applicable  to  any  part 
of  the  world.)  He  arrives  on  the  ground,  which  is 
distant  about  ten  miles  from  a  small  Mexican  town, 
and  finds  things  exceedingly  crude  —  in  fact  the  only 
attractive  feature  is  the  climate.  The  accommoda- 
tion provided  consists  of  an  adobe  (mud-brick)  build- 
ing of  two  rooms  to  serve  as  bedroom,  dining-room, 
kitchen,  office,  store-room,  assay  office,  etc.  How- 
ever, it  is  not  our  intention  to  descant  upon  the 
"hundred  and  one"  obstacles  to  be  encountered  but 
simply  to  confine  our  remarks  to  the  office  part  of  the 
business. 

The  first  operation  will  be  to  open  a 


CASH  BOOK 

or  "  Libro  de  Caja"  as  it  is  called  in  Spanish.  At  the 
local  store  in  the  town  a  cash  book  can  be  purchased, 
already  lined  and  ruled,  similar  to  Fig.  1.  This 
blank  book  will  answer  the  purpose  temporarily  until 
the  office  becomes  better  established.  It  should  have 
the  headings  —  on  the  left  side  "Receipts"  and  on 
the  right  side  "  Expenditure."  We  will  suppose  that  the 
Boston  office  of  the  Federal  Mining  Company  has  de- 
posited with  the  Miners  Bank  of  Mexico  City  the  sum 
of  $10,000  Mexican  pesos  against  which  drafts  are 
to  be  drawn.  As  previously  stated,  Old  Mexico  is 
simply  being  referred  to  as  an  example ;  it  is  immaterial 
whether,  for  local  purposes,  drafts  are  to  be  drawn 
on  a  bank  in  Denver,  Colo.,  Mendoza,  Argentine 
Republic,  or  Brisbane,  Queensland,  Australia.  Pre- 
sumably, the  young  man  appointed  as  superintendent, 
whom  we  will  call  Robert  Lester,  has  received  an 
advance  in  cash  from  the  Federal  Mining  Company 
in  Boston  to  pay  his  traveling  expenses,  etc. 

His  first  operation,  therefore,  would  be  to  charge 
his  cash  with  the  full  amount,  say  $500  gold,  which  at 
exchange  rate  of  200  per  cent  would  be  $1000  Mexican 
pesos  —  or  in  other  words  one  American  dollar  is 
worth  two  Mexican  pesos  —  and  the  $1000  will  appear 
on  the  "Receipts"  side  of  Cash  Book  (see  Fig.  1). 
On  the  "Expenditure"  side  of  Cash  Book  he  should 
credit  his  cash  with  the  total  sum  of  his  traveling  ex- 
penses from  Boston  to  destination  —  as  shown  on  Fig.  1. 

3 


SIMPLE   MINE  ACCOUNTING 


Fig. 
CASH 


RECEIPTS 


DATE 

FROM                            WHOM 

DRAFT  NO. 

AMOUNT 

5 

1 

To  cash  advanced  to  R.  Lester  in  Boston 

" 

$500.00  U.  S.  Cy.  @  each  200% 

1000 

00 

15 

Smith  &  Co. 

2000 

55 

00 

17 

Renecke  &  Co. 

2001 

500 

00 

n 

«             i. 

2002 

300 

00 

«             « 

2003 

200 

00 

SIMPLE   MINE  ACCOUNTING 


No.  i 
BOOK 


EXPENDITURE 


DATE 

DESCRIPTION 

VOUCHER 
NO. 

AMOUNT 

5 

7 

R.  Lester,  traveling  expenses 

1 

225 

00 

8 

Telegram  to  Boston  (F.  M.  Co.) 

2 

00 

9 

1  common  lamp  for  office 

2 

25 

15 

Smith  &  Co.,  stationery 

2 

55 

00 

ii 

Pay-roll,  labor 

3 

415 

00 

it 

Express  ch'gs  on  stationery 

4 

37 

6  SIMPLE  MINE  ACCOUNTING 

R.  Lester,  traveling  expenses,  Voucher  1,  $225. 

This  brings  us  to  the  next  operation,  viz.,  making 
out  the  voucher.  Cash  has  been  credited,  as  we  see, 
with  Voucher  No.  1,  but  the  voucher  itself  should  be 
itemized  in  detail  as  shown  on  Fig.  3.  By  charging 
cash  with  $1000  and  crediting  cash  with  $225  leaves  a 
balance  in  cash  of  $775  Mexican  pesos,  out  of  which 
future  payments  can  be  made  as  called  for. 

It  will  most  likely  happen  that  odd  payments  will 
have  to  be  made  for  small  articles,  occasional  mes- 
senger service,  etc.,  for  which  proper  receipts  cannot 
be  obtained.  These,  if  paid  for  when  out  of  the 
office,  should  be  jotted  down  in  a  vest-pocket  memo- 
randum book,  from  which  they  should  be  entered  into 
Cash  Book  each  day.  A  word  of  warning  will  not  be 
amiss  in  regard  to  these  petty  cash  payments.  Let 
no  payment,  however  insignificant,  on  Company's 
account  pass  without  entry  into  books,  otherwise  at 
end  of  month  when  cash  statement  is  made  up  for 
headquarters  it  will  be  hard  to  reconcile  actual  cash 
on  hand  with  the  payments  made.  For  all  telegrams, 
express  charges,  etc.,  receipts  should  be  obtained  and 
kept  on  file  at  mine  for  future  reference  if  necessary. 
Such  charges,  at  end  of  month,  can  be  grouped  and 
entered  on  a  regular  voucher  form,  giving  dates  and 
particulars.  It  will  be  seen  that  Voucher  No.  2,  Fig.  1, 
is  for  Smith  &  Go's,  bill  for  stationery,  amounting  to  $55. 

Now,  as  this  stationery  came  from  Mexico  City, 
payment  must  be  made  by  draft  on  Mexico  City. 
We  have  already  alluded  to  the  fact  that  the  Boston 
office  has  placed  with  the  Miners  Bank  the  sum  of 
$10,000.  Following  the  general  custom  and  in  accord- 
ance with  instructions  received  by  them,  the  bank 


SIMPLE  MINE  ACCOUNTING  7 

has  furnished  Robert  Lester,  Superintendent  of  Federal 
Mining  Company,  Las  Mesas,  Corrientes,  a  draft  book. 
A  draft  is  therefore  drawn  in  favor  of  Smith  &  Co.  and 
mailed  to  them  at  Mexico  City,  same  being  entered  in 
Cash  Book  with  corresponding  number  of  draft. 

The  town  of  Las  Mesas,  though  by  no  means  large, 
does  a  considerable  business,  consequently  it  will  be 
an  easy  matter  to  obtain  funds  from  the  storekeepers 
in  return  for  drafts  issued  in  their  favor  on  Mexico 
City.  Usually,  under  such  circumstances,  drafts  are 
issued  at  par;  in  other  words,  the  storekeeper  pays 
no  premium  nor  discounts  the  face  value  of  the  draft 
drawn.  In  many  cases,  however,  money  has  to  be 
sent  by  express  and  escorted  by  armed  guards  from 
the  railroad  to  the  mines,  especially  large  sums  in- 
tended for  pay-roll. 

As  the  development  of  the  property  progresses  it 
will  be  found  that  the  blank  memorandum  book  which 
has  served  the  purpose  for  cash  entries,  and  which 
answered  very  well  temporarily,  ought  to  be  dis- 
carded for  a  proper  Cash  Book  (see  Fig.  2.) 

The  columns  are  self-explanatory.  On  the  side 
marked  "  Dr."  or  Debit,  which  we  will  now  use  in 
place  of  "Receipts"  we  have  three  columns.  After 
closing  the  accounts  for  previous  month  the  balance 
should  be  brought  forward  as  cash  on  hand  (see  first 
entry,  Fig.  2).  "To  balance  $752.09"  in  outside 
column  for  cash.  In  the  column  marked  "Various" 
can  be  entered  such  items  which  do  not  properly  be- 
long to  either  of  the  other  columns. 

For  instance :  —  In  checking  up  pay-roll,  Voucher 
No.  3  for  May,  it  was  found  that  a  peon  Tomas  Castro 
was  credited  with  half  a  day  too  much.  As  the 
accounts  were  closed  when  this  discovery  was  made 


8  SIMPLE  MINE  ACCOUNTING 

we  charge  cash  with  0.75  in  our  June  statement  (see 
Fig.  2)  in  the  column  marked  "  Various."  On  the 
same  Voucher  No.  3  for  May,  pay-roll  showed  $3.25 
as  due  a  peon  named  Juan  Garcia.  This  man  did  not 
collect  his  pay  and,  from  information  received,  it  was 
learned  that  he  had  left  the  camp,  consequently  the 
money  which  he  should  have  collected,  and  which 
was  on  hand  after  pay-roll  was  taken  up  in  Cash  Book, 
should  be  charged  to  Cash  in  June,  seeing  that  credit 
has  been  received  for  same  on  Voucher  No.  3  in  May 
(see  Fig.  2)  entry  in  cash  column.  The  established 
custom  of  the  district  being  to  pay  laborers  and  con- 
tractors every  fortnight,  it  will  be  necessary  to  obtain 
funds  from  the  local  stores  in  Las  Mesas,  which  is 
done  by  issuing  drafts  Nos.  2050,  2051,  2053  in  favor 
of  Reneckie  &  Co.  in  the  sum  of  $6000  (see  Draft 
column,  Fig.  2).  In  other  words,  silver  pesos  and 
bills  of  different  denominations  were  handed  to  Super- 
intendent for  the  drafts  made  out  in  their  favor.  On 
June  18  (see  Fig.  2)  there  is  an  item  "Mendez  e 
hijo,  lumber,  $31.68."  This  is  for  some  lumber  sold 
to  a  local  merchant  in  Las  Mesas. 

Whilst  the  Federal  Mining  Company  is  not  in  the 
lumber  or  any  other  outside  selling  business,  it  may 
happen  that,  to  oblige  residents  in  the  neighborhood, 
occasionally  this  will  be  done.  The  lumber  in  this 
case  was  figured  at  cost,  plus  10  per  cent,  the  value  of 
which  is  entered  in  cash  column.  (This  will  be  re- 
ferred to  later  under  Material  Account  and  credited  to 
Material  Account.) 

The  Cash  Book  proper  is  only  concerned  with  cash, 
and  for  this  reason,  while  deductions  are  made  from 
Pay-roll  for  Hospital  Fund  and  for  materials  sold  to 
contractors,  credit  is  obtained  in  the  Journal  Record 
and  not  in  Cash  Book. 


SIMPLE  MINE  ACCOUNTING  9 

On  the  other  side  of  the  Cash  Book,  "  Cr."  or  Credit, 
which  should  be  used  in  place  of  "Expenditure,"  we 
start  in  with  Postage  Stamps.  This  being  an  item 
which  may  have  to  be  repeated  during  the  month, 
together  with  express  charges,  telegrams,  etc.,  should 
be  entered  in  the  column  "  Various."  It  will  also  be 
noted  that  $6  has  been  paid  to  Pedro  Banda,  a  peon 
who  was  injured  —  this  being  a  weekly  cash  benefit, 
whilst  incapacitated,  in  addition  to  medical  attend- 
ance. (This  will  be  referred  to  under  Hospital  Fund.) 
All  charges  entered  in  the  "Various"  column  should 
be  grouped  under  their  several  headings  on  a  voucher 
form  and  the  total  sum  of  voucher  carried  out  into  the 
"Invoice"  column,  at  end  of  month. 

Regarding  the  advance  to  Marcos  Ramirez;  this 
was  made  to  a  contractor  who  was  sinking  a  shaft, 
he  not  being  able  to  wait  until  pay-day.  The  $35 
will  be  deducted  from  pay-roll,  and  as  the  amount 
naturally  is  included  in  the  total  sum  of  the  pay-roll 
for  the  first  fortnight,  we  simply  strike  out  the  item 
-  not  by  scratching  out  the  figures,  not  by  charging 
the  cash  with  the  $35,  but  simply  by  placing  under  the 
figures  in  red  ink  the  same  amount,  to  signify  that  the 
amount  has  been  taken  up  and  also  to  avoid  taking 
credit  for  the  payment  twice.  The  whole  object, 
as  may  readily  be  seen  by  the  intelligent  reader,  is  to 
make  the  entries  so  that  the  different  accounts  can 
be  easily  checked  and  also  serve  the  purpose  of  ready 
reference. 

During  the  month  materials  and  supplies  will  be 
constantly  coming  in.  Those  in  carloads  can  be 
identified  by  car  number  and  railroad  expense  bill, 
small  articles  by  Expense  Bill  Number  and  duly 
entered  in  the  "Freights"  column.  At  end  of  the 


10 


SIMPLE  MINE  ACCOUNTING 


DEBIT 


Fig. 

CASH 
FEDERAL  MINING 


DATE 

FROM  WHOM  RECEIVED 

DRAFT  NO. 

DRAFTS 

VARIOUS 

CASH 

6 

1 

To  Balance 

752 

09 

u 

Reneckie  &  Co. 

2050 

500 

00 

II 

«           « 

2051 

500 

00 

3 

Eastern  R.  R.  Co. 

2052 

294 

00 

« 

Correction,  overcharge  , 

voucher  No.  3,  May. 

$day.  Tomas  Castro. 

75 

11 

Unclaimed  wages, 

voucher  No.  3,  May. 

Juan  Garcia 

3 

25 

10 

Reneckie  &  Co. 

2053 

5000 

00 

15 

National  Explosive  Co. 

2054 

5300 

00 

ii 

Mexican  Lumber  Co. 

2055 

370 

00 

« 

American     Telephone 

Co. 

2056 

150 

00 

18 

Medical  Supply  Co. 

2057 

30 

00 

« 

Mendez  6  hijo,  lumber 

31 

68 

" 

Eastern  R.  R.  Co. 

2058 

2889 

70 

« 

Trevino  y  Cia. 

2059 

2000 

00 

25 

Reneckie  &  Co. 

2060 

1000 

00 

n 

«            « 

2061 

3000 

00 

it 

11            « 

2062 

2000 

00 

30 

Sam  Lung 

155 

00 

(i 

Reneckie  &  Co. 

2063 

2007 

45 

25041 

15 

25041 

15 

75 

75 

25983 

92 

SIMPLE  MINE  ACCOUNTING 


11 


No.  2 

BOOK 
COMPANY 


CREDIT 


DATE 

DESCRIPTION 

VARIOUS 

FREIGHT 

PAY-ROLL 

INVOICES 

6 

1 

Postage  stamps 

10 

00 

3 

Express,    signal    wire 

from  Mexico 

2 

15 

" 

R.  R.  freight,  lumber 

car  4976,  No.  39 

294 

00 

7 

Reneckie  &  Co.,  hard- 

ware 

61 

80 

8 

Telegram    to    Boston 

(F.  M.  Co.) 

2 

70 

9 

Hospital,   cash   to   P. 

Banda 

6 

00 

« 

M.  Ramirez,  cash  ad- 

vance 

*35 

00 

15 

Pay-roll,  1st  fortnight 

6213 

75 

« 

Nat.    Explosive    Co., 

powder 

5300 

00 

« 

Mexican  Lumber  Co., 

car  4976 

370 

00 

18 

R.  R.   freight,    explo- 

sives, car  5879,No.4  1 

489 

70 

" 

R.  R.  freight,  mach'y, 

car  12,575,  No.  43 

2400 

00 

« 

Am.    Telephone    Co., 

batteries,  etc. 

150 

00 

18 

Express,    office     sup- 

plies for  Mexico 

4 

20 

a 

Medical    Supply    Co., 

cost 

30 

00 

30 

Sam  Lung,  hotel  sup- 

plies 

155 

00 

a 

R.  R.  frt.,   telephone 

mat'ls,  No.  52 

5 

90 

it 

Pay-roll,  2nd  fortnight 

7646 

80 

u 

employees 

1665 

96 

" 

Telegrams  ,express  ,etc  . 

25 

05 

25 

05 

" 

R.  R.  freight  charges 

3189 

60 

3189 

60 

" 

Pay-roll,  labor 

13860 

55 

13860 

55 

it 

Balance 

1175 

96 

25983 

92 

12  SIMPLE  MINE  ACCOUNTING 

month  the  whole  can  be  grouped  on  a  voucher  form 
and  the  total  carried  out  to  "  Invoice"  column.  Pay- 
roll column  should  contain  the  net  sum  which  is  paid 
out  in  cash  each  pay-day,  whether  weekly,  fortnightly 
or  other  periods,  and  at  end  of  month  total  can  be 
carried  into  "Invoice"  column.  Regarding  the  de- 
duction for  materials  and  contributions  to  hospital 
fund,  these  will  be  entered  in  Journal  Record  Book 
and  will  be  referred  to  later.  From  the  above  it  will 
be  seen  that  the  "  Invoice"  column  is  used  for  vouchers 
complete  in  themselves.  Here  let  it  be  observed  that 
each  country  has  its  own  language  and  laws  and  that 
financial  books  must  be  kept  in  language  of  the  coun- 
try. For  example,  in  Mexico,  instead  of : 

Cash  Book  read  Libro  de  Caja. 

Debit  "  Debe. 

Credit  "  Haber. 

Draft  "  Libranza. 

Voucher  "  Recibo. 

Various  "  Varies. 

Freights  "  Fletes. 

Pay-Roll  "  Ray  a. 

Invoice  "  Factura. 

As,  however,  this  work  is  not  a  Spanish  Primer,  we 
will  leave  the  question  of  language  to  each  reader  to 
acquire  in  his  own  way. 


VOUCHERS 

In  view  of  the  fact  that  all  original  invoices  (for 
purposes  of  this  work)  and  receipts  go  to  Headquarters 
in  Boston,  it  is  not  only  desirable  but  necessary  that 
same  be  in  duplicate,  the  latter  for  file  at  the  mine. 
Style  and  size  for  mine  vouchers  which  will  be  found 
best  adapted  for  the  purpose  is  seen  in  Fig.  3,  say 
8^  in.  wide  by  7  in.  or  10  in.  long,  printed  in  copying 
ink.  On  the  reverse  side  should  be  printed  in  black 
ink  the  particulars  given  in  Fig.  4.  The  size  men- 
tioned will  be  convenient  for  typewriter  and,  when 
folded  once  or  twice,  prove  to  be  of  proper  dimensions 
for  a  large  manila  envelope. 

Seeing,  however,  that  invoices  of  all  kinds  and  sizes 
are  received  from  outside  sources,  a  rubber  stamp, 
made  exactly  to  correspond  to  the  printing  on  Fig.  4, 
should  be  obtained  and  used  on  the  outside  of  all 
documents  intended  for  vouchers,  after  folding  them 
to  same  width  and  length  as  company  voucher  forms. 
As  previously  stated,  all  invoices  should  be  in  dupli- 
cate, but  where  —  as  in  Mexico  —  the  law  requires 
that  invoices  be  stamped,  only  the  originals  need  carry 
stamps.  Such  documents  as  Railroad  Expense  Bills 
should  be  kept  (copies)  in  special  book  and,  when 
originals  are  sent  to  the  shipper  who  pays  freight 
charges,  an  extra  copy  should  be  taken  for  the  Boston 
office.  If  for  any  reason  a  duplicate  invoice  is  not 
furnished,  then  an  exact  copy  should  be  made  at  the 

13 


14 


SIMPLE   MINE  ACCOUNTING 


Fig.  No.  3 


No. 

LAS  MESAS,  May  7,  1907 
Charge  Gen.  Expense 
Credit 


FEDERAL  MINING  COMPANY 

to 
ROBERT  LESTER,  Sup'd't 


DATE 

DESCRIPTION 

May 

7 

To  traveling  expenses  from  Boston  to  Las 
Mesas,  Mexico  — 
R.  R.  fare,  Boston  to  Mexico  City 
Pullman 

140 
25 

00 
00 

Meals  en  route 

20 

00 

Hotel 

8 

00 

Coach-hire 

2 

00 

R.  R.  to  Las  Mesas  from  " 

23 

00 

Excess  baggage 
Porterage 
Rec'd 

5 

1 

75 
25 

225 

00 

ROBT.  LESTER 

Fig.  No.  4 

No. 

FEDERAL  MINING  COMPANY 

Las  Mesas,  Cor.  Mexico 

Month                190 

SIMPLE  MINE  ACCOUNTING  15 

mine  for  filing.  All  packing  lists  to  be  attached  to  the 
duplicate  invoices  and  kept  at  mine  for  future  refer- 
ence. It  will  be  surprising  the  amount  of  work  this 
will  save  the  office  staff  later  on.  In  this  connection 
one  might  also  suggest  keeping  a  small  index  book  in 
which,  at  end  of  month,  name,  number  of  invoice  be 
given,  with  month  and  year.  Five  years  hence,  when 
the  manager  wishes  to  know  what  the  cost  of  a  certain 
hoist  amounted  to,  it  will  be  a  matter  of  ten  minutes 
to  find  the  invoice  instead  of  two  days. 

The  form  (Fig.  3)  will  also  be  suitable  for  making 
out  bills  against  persons  buying  materials  from  the 
company.  For  instance,  on  Fig.  2  there  is  an  item 
"Mendez  e  hi  jo"  (Spanish  for  Mendez  &  Son)  for 
lumber  sold,  and  same  is  made  out  as  shown  on  Fig.  5. 
The  cost  of  the  lumber  f .  o.  b.  Las  Mesas  was  $80,  plus 
10  per  cent,  makes  $88  per  Mil  feet,  hence  the  price 
would  be  as  indicated  on  the  bill  against  Mendez  e 
hi  jo. 

On  the  bill  will  be  noted  the  words  "charge"  and 
"  credit."  Now,  as  the  lumber  belongs  to  Material 
Account  (we  shall  refer  later  to  this  subject),  the 
amount  received  from  Mendez  e  hi  jo  is  credited  to 
Material  Account  and,  seeing  also  that  the  money  was 
actually  received,  charged  to  cash  as  per  entry  in  Fig.  2. 


16 


SIMPLE  MINE  ACCOUNTING 


MENDEZ  E  HIJO 


Fig.  No.  5 

No.     , 
LAS  MESAS,  June  10,  1907 

Charge,  Cash 

to  Credit  Material  % 

FEDERAL  MINING  COMPANY 


DATE 

DESCRIPTION 

6 

10 

10  boards  2  X  12  X  18  —  360  ft.  @  88.00 

31 

68 

DRAFTS 

Every  one  who  has  had  any  business  experience  is 
more  or  less  familiar  with  drafts  and  checks.  We  have 
referred  to  various  drafts  drawn  for  different  purposes. 
In  Fig.  6  is  shown  form  of  draft  as  used  by  the  Miners 
Bank,  Mexico  City,  with  stub  of  same.  In  issuing 
draft  it  would  be  well  to  accustom  one's  self  to  writing 
particulars  on  the  stubb  first.  By  "Particulars"  is 
meant  in  whose  favor  drawn  and  for  what  purpose, 
with  the  amount.  Another  suggestion  is  that,  com- 
mencing with  the  first  number,  the  draft  itself,  in  addi- 
tion to  the  bank  number,  should  begin  with  No.  001, 
but  on  the  stub  simply  No.  1,  advising  the  bank  of 
the  latter,  as  precaution  in  case  check  book  fell  into 
the  hands  of  an  unauthorized  person  who  wished  to 
make  use  of  same  by  forging  the  Superintendent's 
name;  any  other  special  mark  will  do  as  well.  Should 
the  issuing  of  drafts  be  of  frequent  occurrence  or  for 
large  amounts,  a  daily  or  weekly  advice  sheet  to  bank 
would  prove  a  further  safeguard. 

In  any  case  balance  should  be  checked  with  bank 
at  end  of  each  month.  When  drafts  are  drawn, 
similar  to  Nos.  2050,  2051,  2053,  the  stub  should  read 
"Cash  for  Pay-roll,"  thus  indicating  that  the  drafts 
were  drawn  in  favor  of  Reneckie  &  Co.  to  obtain  funds 
for  the  purpose  named. 


17 


18 


SIMPLE  MINE  ACCOUNTING 


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PAY-ROLLS 

For  the  first  few  weeks  it  will  be  almost  impossible 
to  make  up  any  itemized  pay-roll,  in  fact  it  is  more 
than  likely  that  many  men  will  be  put  on  or  a  contract 
made,  with  only  a  pencil  memorandum  of  price  from 
which  a  rough  list  is  prepared  prior  to  paying  off  of 
the  men,  checking  each  man  as  he  is  paid.  Later  on, 
as  the  operations  increase,  embracing  the  San  Juan, 
San  Pedro,  and  the  San  Marcos  mines,  each  property 
to  have  its  own  account,  it  will  be  found  absolutely 
necessary  to  install  some  simple  and  satisfactory 
method  of  handling  the  business.  Fig.  7  will  prove 
an  expeditious,  economical,  and  accurate  system,  sub- 
ject of  course  to  local  modifications,  as  a  Time  Book 
for  men  on  day's  pay,  size  4£  in.  by  7^  in.,  with  strong 
covers  to  stand  rough  usage.  Each  mine  can  have 
its  own  book  and  foreman  held  responsible,  and  if  more 
than  one  department  at  any  mine,  the  foreman  of  each 
department,  for  all  entries  in  his  own  Time  Book.  If 
conditions  will  allow,  payment  to  be  made  twice  each 
month,  15th  and  last  day  —  pay-day  to  fall  on  Satur- 
day following  dates  mentioned;  i.e.,  should  the  15th 
fall  on  Thursday  books  can  be  made  up  to  15th  and 
the  extra  days  16th  and  17th  carried  forward  to  next 
pay-roll.  Where  the  15th  fell  on  the  Saturday  there 
would  be  no  time  to  make  up  the  books,  consequently 
pay-day  would  follow  on  the  next  Saturday.  Pay-day 
would  fall  every  fortnight  with  the  exception  of  three 

19 


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SIMPLE  MINE  ACCOUNTING  21 

or  four  times  in  the  year,  when  a  period  of  three  weeks 
would  elapse  between  pay-days.  The  Time  Book  has 
sixteen  spaces  to  allow  for  time  between  the  16th  and 
31st  in  months  containing  that  number  of  days. 
Under  this  system,  to  avoid  extra  work  at  the 
mines  by  timekeeper  or  foreman  in  making  entries 
twice  over,  two  Time  Books  will  be  required,  viz.,  one 
for  1st  to  15th  and  the  second  from  16th  to  end  of 
month,  because  on  the  15th  the  first  Time  Book  will 
be  sent  to  the  office  for  making  up  the  pay-roll  and 
will  no  doubt  be  kept  two  or  three  days  for  the  purpose; 
in  the  meantime  the  second  book  is  already  at  the  mine 
for  entries  to  be  made  covering  second  fortnight. 
The  foreman  at  the  mine  enters  in  the  Time  Book 
name,  occupation,  time  worked,  and  rate  per  day, 
attaching  his  signature  at  the  bottom.  At  the  office 
the  extensions  will  be  made,  showing  gross  amount 
due  each  man  in  the  "Total"  column.  Deductions 
for  hospital  fund,  rent  or  advances  made  will  appear 
in  their  respective  columns,  and  in  the  "Net"  column 
the  actual  amount  to  be  paid  in  cash.  The  column 
for  "Advances"  can  be  used  when  a  man  when 
commencing  work  is  short  of  funds  and  asks  for  a 
loan  —  such  request  to  be  made  in  writing  by  Fore- 
man and  held  against  man's  time  on  pay-day.  It 
may  also  be  employed  for  any  old  materials  sold  to 
laborers,  in  such  case  notation  to  be  made  in  the  Time 
Book.  A  separate  book  should  be  kept  for  contracts 
(see  Fig.  8) .  Most  of  the  columns  are  self-explanatory. 
Aurelio  Hernandez  has  ten  men;  the  reason  for  show- 
ing number  of  men  employed  by  each  contractor  is  to 
ascertain  how  much  each  man  is  receiving  per  day 
and  to  deduct  corresponding  amount,  due  from  every 
one,  as  contribution  to  Hospital  Fund,  through  the 


22 


SIMPLE  MINE  ACCOUNTING 


Fig.  No.  8 
MINE  CONTRACT  BOOK 
MINE  FROM  TO  190 

1 

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SIMPLE  MINE  ACCOUNTING  23 

contractor.  In  the  column  for  meters  certain  num- 
bers or  letters  can  be  assigned  to  distinguish  each 
class  of  work,  whether  sinking  shaft,  development  or 
stoping  ore,  to  serve  as  a  guide  for  distribution  of  the 
account.  The  mine  foreman  enters  name,  meters 
driven,  cars  or  tons  of  ore  mined  with  price  for  each 
and  all  extensions  are  made  at  the  office.  After 
ascertaining  the  net  amount  due  each  man,  whether 
on  day's  pay  or  contractor,  we  proceed  to  enter  on  a 
loose  leaf  or  in  a  book  —  the  latter  being  much  more 
satisfactory  —  the  name  of  each  man,  giving  him  a 
number  with  net  amount  due,  for  example : 

(1)  Juan  Alvarez    28.65 

(2) 
(3) 
(4) 
(5) 
(6) 
(7) 
(8)  Aurelio  Hernandez 153.50 

Each  mine  is  kept  separate,  commencing  with  San 
Juan  Mine  up  to  last  number  for  that  mine,  and  then 
follow  with  consecutive  number  for  San  Pedro  Mine 
and  so  on  till  last  number  for  the  San  Marcos  Mine. 
From  this  list  of  names  and  the  amounts  shown 
against  each  man,  corresponding  tickets  are  made 
out  corresponding  exactly  to  the  list.  These  tickets 
can  be  of  different  colors  and  printed  in  manner 
shown  on  Fig.  9.  Each  mine  foreman  receipts  for 
the  number  of  tickets  pertaining  to  his  department 
and  personally  distributes  the  tickets  to  the  proper 
parties.  Every  man  must  collect  his  pay  in  person 
or,  if  unable  through  sickness,  ticket  to  be  endorsed 


24 


SIMPLE  MINE  ACCOUNTING 


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SIMPLE   MINE  ACCOUNTING  25 

for  payment  to  responsible  person,  by  the  foreman. 
No  ticket  to  be  transferable  to  a  storekeeper,  etc. 

The  Pay-roll  Book  proper  is  now  made  up  from 
Time  Books  and  the  Contract  Books.  This  book  is 
a  replica  of  the  other  two,  but  of  larger  size,  dispensing 
with  the  columns  for  "Advances"  and  "Net"  (see 
Fig.  10).  A  convenient  size  would  be  17  in.  high  by 
15  in.  wide  and  contain  about  75  double  leaves.  The 
second  sheet  to  be  of  thin,  strong  paper  printed  exactly 
same  as  first  leaf,  but  in  addition  should  be  perforated 
(see  dotted  line). 

Pay-roll  can  made  be  up  with  indelible  pencil,  using 
carbon  paper  for  the  second  leaf.  The  last  column 
to  be  used  for  the  "Distribution"  No.  11  (see  Dis- 
tribution of  Accounts).  The  total  sum  of  the  pay- 
rolls for  the  three  mines,  less  the  deductions  for 
hospital,  materials,  and  rent,  will  then  be  entered  in 
the  column  in  the  Cash  Book  marked  "  Pay-roll." 

In  addition  to  the  labor  pay-roll  there  will  also  be 
one  for  the  monthly  employees,  such  as  Superintendent, 
Mechanics,  Foremen,  etc.  A  form  similar  to  Fig.  11 
will  be  found  suitable.  This  to  be  in  copying  ink. 
After  all  signatures  are  obtained  same  should  be  copied 
in  regular  tissue  copy  book  kept  for  monthly  state- 
ments. A  duplicate  can  also  be  made  out,  simply 
showing  the  total  sum,  with  distributions,  to  be  filed 
with  other  duplicate  vouchers  at  the  mine.  The  net 
sum  of  this  voucher  should  appear  in  the  "Invoice" 
column  of  cash  book.  The  $7.50  deduction  for  hospi- 
tal will  enter  your  Journal  Record  Book,  of  which 
more  later. 


26 


SIMPLE  MINE  ACCOUNTING 


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SIMPLE   MINE   ACCOUNTING 


27 


Fig.  No.  it 

FEDERAL  MINING  COMPANY 
LAS  MESAS,  CORRIENTES,  MEXICO 

EMPLOYEES  PAY-ROLL 


No.  11 


NAME 

OCCUPA- 
TION 

DAYS 

RATE 

AMERICAN 
CURRENCY 

MEXICAN 

CURRENCY 

SIGNA- 
TURE 

HOS- 
PITAL 

Robt.  Lester 

Sup'dt 

200 

00 

400 

00 

1 

.50 

Alfonso  Ibarra 

Physician 

173 

46 



— 

Alex.  McDonald 

Mechanic 

150 

00 

300 

00 

1 

50 

Samuel  Ferguson 

Foreman 

150 

00 

300 

00 

1 

.50 

George  Jenkins 

Shift  Boss 

125 

00 

250 

00 

1 

50 

Edward  Masters 

n        n 

125 

00 

250 

00 

1 

,50 

1673 

46 

T 

50 

Distribution 

Gen.  expense 1000.00 

Hoisting,  S.  Juan 250.00 

Con.  mach'y,  S.  Pedro 250.00 

75%    receipts  —  Hospital 173.46 

Rate  of  Exch.  200% 


HOSPITAL  FUND 

It  is  customary  in  all  mining  camps,  where  a  large 
number  of  men  are  employed,  to  engage  a  doctor,  who 
is  both  surgeon  and  physician.  Sometimes  he  is  a 
salaried  official  who  devotes  his  whole  time  to  the 
company  —  the  latter  furnishing  rooms,  appliances, 
medicines,  etc.  A  better  system,  perhaps,  is  to  pay, 
say  75  per  cent  of  the  receipts,  these  of  course  coming 
out  of  the  deductions  from  pay-roll,  the  doctor  to 
give  attendance  and  supply  all  medicines.  Out  of 
the  remaining  25  per  cent  supplementary  aid  in  the 
form  of  cash  may  be  allowed  to  workmen  or  their 
families  and,  in  case  of  death,  funeral  expenses  may 
be  paid  with  a  small  monetary  contribution  to  the 
surviving  relatives. 

A  printed  form  should  be  used,  similar  to  Fig.  12. 
This  can  be  adapted  to  both  purposes,  i.e. :  by  the  fore- 
man of  the  mine,  who  would  address  same  to  the  medical 
man  and  on  the  bottom  line  write  "  Medical  Atten- 
tion," stating  cause;  the  doctor  when  using  the  ticket 
would  address  superintendent  or  man  in  charge  of 
the  office,  giving  same  particulars,  excepting  that  in 
place  of  "Medical  Attention"  he  would  write  the 
amount  to  be  paid  in  cash.  The  fund  should  be  so 
adjusted  that  the  receipts  only  slightly  exceed  the 
disbursement,  carried  forward  from  month  to  month. 


29 


30  SIMPLE  MINE  ACCOUNTING 


Fig.  No.  12 

FEDERAL  MINING  COMPANY 

HOSPITAL  TICKET 

6/9,  1907 
MR.  ROBT.  LESTER 

Please  give  PEDRO  BANDA  $6.00,  workman  in  S.  Juan  Mine.     Cause  - 
sickness. 

Signed 

A.  IBARRA,  Physician. 


MATERIAL  ACCOUNT 

The  material  account  is  by  no  means  the  least 
important  part  of  bookkeeping.  This  is  a  department 
in  itself  at  large  mining  camps,  with  separate  staff, 
books,  forms,  etc.  However,  we  are  now  concerned 
with  the  question  on  a  smaller  scale. 

There  are  certain  supplies  and  materials  constantly 
being  used  at  the  mines  on  which  it  is  very  necessary 
to  keep  a  vigilant  watch,  checking  all  the  requisitions 
almost  down  to  the  last  fraction,  for,  while  cash  is  in 
charge  of  a  responsible  person,  it  frequently  happens 
that  materials  are  handled  by  ignorant  and  unscrupu- 
lous workmen.  There  are  several  articles  which  are 
purchased  in  large  but  utilized  in  small  quantities, 
such  as  lumber,  fuel,  candles,  explosives,  sacks, 
stable  supplies,  etc.,  that  may  properly  be  included 
in  the  Material  Account  (see  Fig.  13).  In  opening 
the  material  account,  say  1st  of  June,  take  an  inven- 
tory of  all  the  supplies  on  hand  which  are  to  be  in- 
cluded in  the  account:  How  many  cases  of  candles, 
size,  number  to  box,  with  price  f.  o.  b.  Las  Mesas. 
How  many  cases  of  powder,  40  per  cent,  60  per  cent, 
black;  how  many  feet  of  fuse,  single  tape,  double; 
how  many  caps,  etc.  In  fact  figure  quantity  and  price 
of  each  article.  Should  prices,  for  any  reason  be  un- 
obtainable, use  the  local  prices  prevailing  for  that 
particular  one  in  question.  The  next  question  will 
be  to  open  a  Warehouse  Book  (see  Fig.  14).  This 

31 


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SIMPLE  MINE  ACCOUNTING  33 

book  shows  everything  on  hand  in  round  figures, 
cases,  pounds,  and  feet;  fractions  need  not  appear  in 
this  book.  For  example :  your  inventory  showed  that 
at  San  Juan  Mine  there  were  eighty  cases  of  candles 
(full)  and  fifteen  single  candles  over.  In  the  Ware- 
house Book  (for  our  present  purpose)  the  odd  fifteen 
need  not  appear,  though  record  is  kept  on  the  mine 
list  which  is  sent  in  on  form  Fig.  15. 

On  the  lumber  side  of  the  Warehouse  Book  the 
number  of  boards  are  given  for  each  size,  at  each 
mine,  obtaining  which  the  numbers  offset  are  figured 
out.  The  quantity  of  slabs  and  poles  are  also  shown 
with  corresponding  prices,  the  total  sum  being  the 
value  of  the  lumber  on  hand,  as  shown  on  Fig.  13. 
In  the  receiving  column  will  appear  the  number  of 
articles  for  which  payment  has  been  made  during 
the  month.  Prices  on  any  article  may  vary  from 
month  to  month,  consequently  the  prices  in  Ware- 
house Book  are  not  fixed  but  subject  to  change  when 
fresh  supplies  are  received.  On  another  form,  Fig.  16, 
all  materials  received  during  the  month  will  be  shown, 
giving  the  voucher  number.  Fig.  16  shows  that  some 
powder  was  purchased  from  the  Explosion  Company, 
their  invoice  price  being  f.  o.  b.  Las  Mesas  station, 
$5789.70.  Now  the  railroad  freight  charges  amount- 
ing to  $489.70  were  paid  by  the  Federal  Mining  Com- 
pany upon  delivery  of  car,  consequently  this  charge 
must  be  deducted  from  the  amount  of  the  invoice. 
A  draft  is  therefore  made  out  in  favor  of  the  Explosive 
Company  for  $5300  and  the  railroad  expense  bill  for 
the  $489.70  is  sent  to  shipper  in  full  settlement  of  the 
bill. 

To  the  above  is  added  the  hauling  charges  from 
Las  Mesas  station  to  the  mines,  which  expense  is 


34 


SIMPLE  MINE  ACCOUNTING 


Fig. 

WAREHOUSE 

FEDERAL  MINING 


ARTICLE 

PRICE 

ON  HAND   1ST 

RECEIVED 

USED 

ON  HAND 

S.J. 

s.p. 

S.M. 

Total 

S.J. 

S.P. 

S.M. 

Total 

S.J. 

Sf. 

S.ll. 

Total 

S.J. 

SJP. 

S.M. 

Total 

Candles  —  6  X  14 

10 

on 

80 

10 

10 

100 

10 

8 

7 

20 

70 

7 

3 

80 

Powder  —  40% 

15 

00 

50 

50 

400 

3 

2 

5 

445 

445 

60% 

18 

00 

20 

2C 

5 

5 

15 

15 

Black 

5 

00 

10 

1C 

2 

1 

3 

7 

7 

Caps  —  XXX 

6 

00 

4800 

100 

100 

5000 

400 

100 

100 

600 

4400 

4400 

Fuse—  S.  T. 

6 

00 

4000 

4000 

400 

100 

100 

600 

3400 

3400 

Fuel  —  Coal,  tons 

20 

00 

30 

10 

10 

50 

10 

ft 

5 

20 

20 

ft 

5 

30 

Wood,  " 

10 

00 

5 

5 

5 

15 

2 

1 

1 

4 

3 

4 

4 

11 

Oils  —  Lub. 

9 

00 

20 

10 

10 

4( 

2 

1 

1 

4 

18 

9 

9 

36 

111. 

10 

00 

10 

1( 

2 

1 

1 

4 

6 

6 

Sacks  —  Jute 

25 

500 

100 

100 

70( 

200 

200 

300 

100 

100 

500 

Fiber 

30 

500 

50 

50 

600 

100 

50 

50 

200 

400 

400 

Stable  —  Corn,  Ibs. 

70 

00 

2000 

200( 

1000 

1000 

1000 

1000 

"          Hay,  bales 

2 

00 

100 

100 

50 

50 

50 

50 

SIMPLE  MINE  ACCOUNTING 


35 


No.  14 

BOOK 
COMPANY 


LUMBER 

PRICE 

ON  HAND  1ST 

REC'D 

USED 

ON  HAND 

REMARKS 

SIZES 

S.J. 

S.F 

S.M 

Tola 

S.J. 

S.J. 

SJ 

S.M 

Total 

S.J. 

s.p. 

s.u 

Tola 

IX    6  X  18 

80 

00 

100 

100 

200 

20 

j 

! 

30 

80 

90 

170 

1  X  12  X  18 

" 

50 

36 

25 

100 

10 

25 

10 

45 

40 

15 

55 

2  X  12  X  18 

" 

75 

12 

13 

100 

40 

4 

6 

50 

35 

8 

't 

50 

3  X  12  X  18 

50 

50 

200 

20 

20 

230 

230 

Poles 

5 

00 

100 

50 

50 

200 

50 

10 

10 

70 

50 

40 

40 

130 

Slabs 

50 

200 

50 

50 

300 

70 

20 

30 

120 

130 

30 

20 

180 

36  SIMPLE  MINE  ACCOUNTING 

calculated  on  basis  of  time  and  materials  consumed 
by  the  Federal  Mining  Company's  teams.  On  Fig.  16 
we  see  that  the  total  cost  laid  down  at  the  mines  on 
400  cases  of  40  per  cent  Dynamite  was  $5965,  equal 
to  $14.91  per  case.  The  stock  on  hand  1st  of  month 
was  figured  at  $15.  As  the  difference  is  only  9  cents 
per  case  the  price  may  remain  in  Warehouse  Book 
(Fig.  14)  at  $15.  With  regard  to  the  price  of  lumber 
it  will  be  seen  that  10,800  ft.  (Fig.  16)  cost  $894  or 
$82.77  per  Mil,  consequently  it  will  be  necessary  to 
ascertain  number  of  feet  on  hand  1st  of  month  at 
$80,  which  we  find,  according  to  Warehouse  Book 
(Fig.  14),  to  be: 

1st.  of  month 9900  ft.  at  80.00  792.00 

Rec'd 10800  "    "  82.77  894.00 

Number  of 20700"    "  81.45  1686.00 

In  other  words,  the  price  is  changed  from  $80  per 
1000  ft.  to  $81.45  until  the  next  shipment,  when  the 
same  operation  is  repeated.  On  Fig.  16  we  have  re- 
ceived Powder  amounting  to  $5965,  and  Lumber, 
$894;  both  these  items  are  entered  on  Fig.  13  and  the 
sum  on  the  two  forms  Fig.  13  and  16  should  agree. 
We  now  proceed  to  ascertain  what  materials  were 
used  and  sold  during  the  month.  Each  mine  foreman 
at  the  end  of  month  reports  movement  of  supplies, 
as  shown  on  Fig.  15.  These  forms  can  be  of  different 
colors  in  the  same  manner  as  the  pay-roll  tickets.  It 
will  be  noted  that  a  greater  quantity  of  materials  is 
stored  at  San  Juan  Mine.  This  is  explained  by  the 
fact  that  the  main  offices,  warehouse,  etc.,  are  ad- 
jacent thereto  and  that  powder,  candles,  oils,  etc.,  are 
received  at  and  distributed  from  that  point.  Each 
mine,  as  indicated  on  Fig.  15,  sends  monthly  reports 
to  the  office.  Data  obtained  therefrom  is  entered 


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38 


SIMPLE  MINE  ACCOUNTING 


Fig.  No.  16 

FEDERAL  MINING  COMPANY 

Las  Mesas,  Corrientes,  Mexico 
STATEMENT  OF  MATERIALS  RECEIVED  DURING 


190 


DESCRIPTION 

VOUCH 
NO. 

AMOUNT 

TOTAL 

Explosives 

400  cases  40%  powder 

3 

5300 

00 

R.R.  frt.    "          "       car  5879,  No.  41 

9 

489 

70 

Wagon  "      " 

10 

100 

30 

it          «        «                ii 

11 

75 

00 

5965 

00 

Lumber 

200  —  3  X  12  X  18,  10800  ft. 

1 

370 

00 

R.  R.  frt.                                    car  4976,  No.  39 

9 

294 

00 

Wagon  frt. 

10 

200 

00 

«         «                      « 

11 

30 

00 

894 

00 

6859 

00 

SIMPLE  MINE  ACCOUNTING  39 

into  Warehouse  Book  (Fig.  14),  and  it  also  furnishes  the 
necessary  information  for  the  correct  distribution  of 
the  charges  (see  distribution  of  accounts).  Coming 
now  to  the  materials  sold  to  the  contractors,  the  cost 
of  which  is  deducted  from  the  different  men  on  the 
pay-roll,  it  is  to  be  observed  that  supplies  are  not  sold 
at  cost  price  nor  is  an  exorbitant  profit  made  on  the 
articles.  For  example:  We  see  that  a  case  of  candles 
6  x  14,  240  to  box,  costs  the  company  $10  Mexican 
pesos.  They  are  retailed  at  5  cents  each  candle  to 
contractor,  or  at  rate  of  $12  per  box.  The  store- 
keepers in  Las  Mesas  sell  a  similar  candle  at  6  cents 
each.  If  price  is  reduced  to  below  5  cents  at  the  mine 
the  men  can  afford  to  buy  a  large  quantity  and  resell 
to  the  merchants  in  town;  if,  on  the  other  hand,  the 
price  is  raised  to  6  cents  the  men  will  procure  their 
candles  from  the  storekeeper  if  a  slight  concession  is 
made  them. 

On  the  15th  and  end  of  each  month  printed  slips 
(see  Fig.  17)  are  sent  to  the  office;  these  slips  can  be  of 
similar  color  to  pay-roll  tickets,  and  the  amounts, 
after  being  checked,  are  entered  into  contractor's  Time 
Book  and  from  that  book  into  the  regular  Pay-roll 
Book.  The  total  sum  of  all  the  slips  for  each  fortnight 
should  agree  with  the  figures  in  the  Pay-roll  Book. 
All  the  sales  at  one  mine  will  be  credited  to  the  mine 
in  the  Journal  Record  Book.  Fig.  15  shows  the  pur- 
pose for  which  the  various  articles  were  used.  This  is 
given  in  an  abbreviated  form  by  simply  giving  the 
distribution  number,  and  this  leads  us  to  the  next  con- 
sideration, viz.: 


40 


SIMPLE  MINE  ACCOUNTING 


MINE 

NAME 


Fig.  No.  17 

FEDERAL  MINING  COMPANY 
S.  JUAN  DATE         6/15 

AURELIO  HERNANDEZ 


1907 


VARIOUS 

CANDLES 

DYNAMITE 

CAPS 

FUSE 

PRICE 

AMOUNT 

240 

05 

12 

00 

100 

11 

11 

00 

100 

01 

1 

00 

100 

01 

1 

00 

25 

00 

DISTRIBUTION  OF  ACCOUNTS 

Before  proceeding  to  enumerate  the  sub-divisions 
employed  it  were  well  to  remark  that  (at  this  stage) 
an  Invoice  Record  Book  be  kept  (see  Fig.  18).  In 
this  book  the  merest  outlines  need  only  be  given, 
seeing  that  invoice  and  packing  list  with  full  details 
are  on  file  in  the  office,  Voucher  No.  7  for  instance. 
In  addition  to  this  an  indexed  book  for  the  desk,  giv- 
ing name  of  article,  railroad  freight  per  ton,  and  price 
per  unit  at  the  mine,  will  be  found  useful.  For  example : 

Article  Origin  R.  R.  rate  ton  Price  Unit  Date 

Cotton  waste       Mexico  City  22.00  0.15  Ib.  June 

This  will  always  be  handy  for  reference,  not  only 
to  check  price  of  one  shipper  against  another,  but  also 
the  same  shipper  against  previous  shipments  and  also 
serve  as  a  check  against  errors  in  railroad  charges. 
Different  companies  subdivide  and  classify  their 
accounts  to  suit  the  peculiar  exigencies  of  their  busi- 
ness. Certain  recognized  modes  of  distribution,  how- 
ever, are  usually  followed  by  mining  companies  and 
may  be  described  thus : 

CONSTRUCTION  ACCOUNT 

(1)  Buildings. 

(a)  Shops,  warehouses. 
(6)  Dwelling  houses,  rooms, 
(c)  Tanks,  reservoirs,  etc. 

(2)  Machinery,  boilers,  hoists. 

(3)  Shafts. 

(4)  Tramway. 

41 


42 


SIMPLE  MINE  ACCOUNTING 


Fig. 


INVOICE 


DATE 

REC'D 

SHIP. 
DATE 

INV. 
NO. 

OFFICE 
NO. 

SHIPPER 

ORIGIN 

DESCRIPTION 

WEIGHT 

6 

18 

4 

3 

7 

.  &  Chalmers 

Chicago 

Machinery 

Carl2575A.T.S.Fe 

11506 

SIMPLE  MINE  ACCOUNTING 


43 


No.  18 
RECORD 


AMOUNT 

R.  R.  CHARGES 

EXPRESS 
CHARGES 

DUTIES 

WAGON 
FREIGHT 

TOTAL 

PER 

UNIT 

REMARKS 

AMOUNT 

E.  B. 

4520 

00 

1875 

00 

43 

525 

00 

250 

00 

7170 

00 

Hoist,  S.Pedro 

Mine 

44  SIMPLE  MINE  ACCOUNTING 

OPERATING  ACCOUNT 

(1)  Prospecting:  to  include  all  labor,  tools,  materials, 

etc.,  used  for  either  surface  or  underground 
work  which  may  properly  be  called  prospecting. 

(2)  Development :  includes  all  labor,  tools,  timber,  etc., 

employed  in  sinking,  drifting  opening  and  block- 
ing out  ore. 

(3)  Stoping:  all  expenses  of  labor  and  materials  of 

drilling  and  breaking  ore,  figured  at  so  much 
per  ton,  car  or  meter. 

(4)  Hoisting:  includes  cost  of  fuel,   lubricating  oils, 

repairs  to  machinery,  labor,  etc. 

(5)  Tramming:   covers   all   expenses   of   hauling   ore 

from  shaft  to  bins,  repairs  to  track,  ore  cars,  pro- 
portion of  stable  expense  for  mules,  labor,  etc. 

(6)  Sampling:  cost  of  tools,  labor,  etc.,  for  sampling 

the  lots  in  yard  after  being  hoisted. 

(7)  Loading,    transportation:    includes    cost   of    ore 

sacks,  hauling  from  mine  to  railroad,  repairs 
to  wagons,  repairs  to  road,  labor  of  teamsters, 
watchmen  at  station,  loading  into  railroad  cars. 

(8)  Laboratory:  all  expenses  of  assay  office,  supplies, 

labor,  salaries,  etc. 

(9)  General  expense:  salary  of  Superintendent,  wages 

of  Mechanic,  Foremen,  Shift-bosses,  and  other 
employees  whose  work  is  general,  such  as  office 
boy,  messenger;  all  supplies  for  office  such  as 
stationery,  ink,  telephone  service,  payments  for 
stamps,  telegrams,  express  charges;  all  supplies 
for  the  mines  not  exclusively  used  at  one  point, 
such  as  cotton  waste;  proportion  of  stable  ex- 
penses for  the  company's  coach  and  team,  etc. 


SIMPLE  MINE  ACCOUNTING  45 

The  "General  expense"  is  distributed  pro  rata 
against  each  mine  at  end  of  month,  according  to 
tonnage  produced. 

Presuming  that  San  Juan  produced  500  tons,  San 
Pedro  and  San  Marcos  each  250  tons,  the  proportions 
would  be  50  per  cent,  25  per  cent,  and  15  per  cent  re- 
spectively. Seeing  this,  however,  that  only  San  Juan 
is  producing,  the  other  mine  being  under  construction, 
the  latter  are  assessed  with  a  fixed  arbitrary  quota 
of  15  per  cent  each,  leaving  70  per  cent  for  the  pro- 
ducing mine  of  San  Juan. 

MATERIAL  ACCOUNT 

Should  be  charged  with  all  expenses  pertaining  to 
this  account,  against  each  particular  shipment  received. 

HOSPITAL  FUND 

All  disbursements  for  sick  benefit,  funeral  ex- 
penses, stationery,  doctor's  salary,  etc. 

"HOTEL" 

This  account  if  kept  by  the  company  is  admin- 
istered as  a  separate  one.  Usually  cook's  wages,  fuel, 
oil,  and  first  cost  of  all  kitchen  and  dining-room  uten- 
sils, rooms,  etc.,  are  furnished  free.  Against  the 
account  are  charged  all  comestibles  (exclusive  of  in- 
toxicating beverages)  all  additions  to  and  replacing 
of  breakages,  etc.  The  account  is  balanced  at  end  of 
each  month  by  deduction  from  men's  pay  according 
to  number  of  meals  eaten. 

This  distribution  of  accounts  may  be  modified  or 
amplified  as  found  to  be  necessary.  So  far  we  have 
dealt  with  construction  and  operating  accounts  for  the 


46  SIMPLE  MINE  ACCOUNTING 

mine;  other  departments  can  be  added,  such  as  mill, 
cyanide,  smelting,  etc.,  and  each  subdivided  in  the 
manner  most  convenient.  From  the  foregoing  it 
will  be  comparatively  easy  to  apportion  the  charges 
to  the  proper  account.  It  may  happen  that  on  any 
one  invoice  more  than  one  account  may  be  represented, 
in  which  case  the  items  covering  each  account  should 
be  put  in  one  sum,  repeating  the  operation  for  each 
separate  account  and  all  shown  in  red  ink  on  the 
voucher.  The  Pay-roll  too  will  show  in  the  outside 
column  the  number  of  account,  after  which  add  the 
amounts  for  same  numbers  together ;  when  this  is  done 
add  total  of  all  the  accounts  to  see  that  sum  agrees 
with  total  sum  of  Pay-roll,  then  enter  the  correspond- 
ing amounts  against  each  number  in  the  order  as 
shown,  commencing  with  "Prospecting"  and  ending 
with  "  General  Expense."  After  obtaining  all  the 
separate  accounts  make  up  a  voucher  showing  each 
one,  against  each  mine;  one  voucher  form  will  answer 
for  the  three  mines  (see  Fig.  19) .  This  method  saves 
considerable  work  in  making  out  a  voucher  for  each 
mine. 

Adopt  the  same  plan  in  making  up  the  voucher  for 
materials  used  (see  Fig.  19).  It  may  occur  to  some 
one  to  ask,  why  all  this  distribution?  The  real  objects 
in  view  are,  to  find  out  what  certain  work  costs,  if  men 
are  being  paid  too  much  per  day,  whether  it  is  cheaper 
to  work  by  contract  or  day's  pay,  if  part  or  all  of  labor 
or  materials  can  be  dispensed  with,  whether  suitable 
labor-saving  devices  should  be  installed,  etc.  These 
and  many  other  things  can  be  ascertained  from  a 
proper  system  of  mine  accounting.  In  saying  this, 
however,  it  should  be  borne  in  mind  that  a  system 
can  become  "top-heavy,"  i.e.,  be  cumbersome  and 


SIMPLE  MINE  ACCOUNTING 
Fig.  No.  19 


47 


No.  12 

Charge  —  as  below 
Credit  Material  % 


FEDERAL  MINING  COMPANY 

to 
DISTRIBUTION  OP  MATERIALS  USED  IN  MINES 


8.  JUAN 

8.  PEDRO 

S.  MARCOS 

MAT'LS 

TOTAL 

Prospecting 

23 

65 

23 

65 

Development 

47 

31 

47 

31 

Stoping 

402 

14 

402 

14 

Transportation 

30 

00 

30 

00 

Hoisting 

238 

00 

238 

00 

Laboratory 

20 

00 

20 

00 

Con.  Shaft 

265 

20 

250 

20 

515 

40 

"     Tramway 

243 

30 

111 

12 

102 

28 

456 

70 

"     Materials  % 

105 

00 

105 

00 

1004 

40 

376 

32 

352 

48 

105 

00 

1838 

20 

• 

48  SIMPLE  MINE  ACCOUNTING 

expensive.  This  is  a  danger  to  guard  against  when 
commencing  to  operate  new  properties.  To  illustrate : 
A  carpenter  loses  a  chisel,  value  $1 ;  he  is  sent  to  look 
for  it  —  cannot  find  it  —  loss  of  time  another  $1. 
Tool  is  deducted  from  his  pay,  carpenter  objects  and 
quits  work.  Work  held  up  and  traveling  expenses 
paid  for  another  carpenter  to  come  from  nearest  town 
-  total  loss  to  company,  $45  for  a  chisel.  In  addition 
to  the  forms  and  books  already  mentioned  a  Journal 
will  be  required.  Strictly  speaking  this  will  be  a 


JOURNAL  AND  DISTRIBUTING  RECORD 

in  which  will  appear  the  whole  of  the  operation  of  the 
mines.  It  should  show  at  a  glance  (see  Fig.  20).  It 
will  be  found  that  certain  accounts,  whilst  chargeable 
to  the  mine  at  Las  Mesas,  are  not  in  reality  cash  trans- 
actions, so  far  as  the  books  at  the  mines  are  concerned. 
For  instance:  The  Hoist  received  for  the  San  Pedro 
Mine,  voucher  No.  7,  Fig.  18,  was  ordered  shipped  by 
the  Boston  office  of  the  Federal  Mining  Company,  who 
made  payment  for  same.  Boston  office  therefore 
advises  the  mines  and  the  latter  receive  the  Fraser  & 
Chalmer  invoice,  showing  amount  in  United  States 
dollars.  Seeing  that  books  are  kept  in  Mexican  cur- 
rency the  amount  is  converted  into  latter  at  the  cur- 
rent rate  of  exchange  and  debited  to  the  San  Pedro 
Mine  on  the  Debit  side  of  Journal  (see  Fig.  20).  On 
the  Credit  side  of  the  Journal  appear  the  same  figures 
and  showing  to  what  account  this  Hoist  was  distrib- 
uted. By  taking  each  voucher  in  the  Journal  (Fig.  20) 
separately  we  shall  better  understand  the  process  of 
distribution : 

VOUCHER  No.  (1)  Is  a  bill  received  for  lumber  and 

therefore  is   charged  to  material 
account. 

(2)  Is  a  bill  for  hardware,  comprising 
bolts  for  San  Juan  Mine,  used  in 
connection  with  the  hoist;  con- 
sequently that  part  of  the  bill  is 

49 


50 


SIMPLE  MINE  ACCOUNTING 


MONTH 


Fig. 

FEDERAL  MINING 

JOURNAL 


SAN 

JUAN 

SAN 

PEDRO 

SAN 

MARCO 

HOTEL 

HOS- 
PITAL 

MATE- 
RIALS 

BOSTON 
OFFICE 

TOTAL 

DATE 

NAME 

6     i 

Mex.  Lumber  Co., 
Reneckie  &  Co. 

155 

0 

452 

00 

155  OC 

45200 

i 

l: 
18 

Nat.  Explosive  Co. 
Am.  Telephone  Co. 
Medical  Supply  Co. 
Sam  Lung 
Fraser  &  Chalmers 

30 

Stamps,  telegrams,  etc. 
Hospital 
Eastern  R.  R.  Co. 

00 

40C 

.. 

Cash  refunded 

11 

Pay-roll,  labor 

102 

50 

" 

;;'         » 

75 

on 

37 

50 

' 

::' 

2H 

45 

42945 

4, 

7 

50 

750 

"    emp  oyees 

Materials  used 

838 

20 

183820 

\ 

31 

68 

25041 

15 

3168 
5041  15 

sold 
Drafts  drawn 

~102 

50 

~37~ 

165 

Gen.  expense  r'/c  pro 

75 

00 

50 

00 

221 

95 

869 

88 

29565 

15 

32026  98 

SIMPLE  MINE  ACCOUNTING 


51 


No.  20 

COMPANY 

RECORD 


190 


DISTRIBUTION 

NO. 

MATE- 
RIAL 

HOS- 
PITAL 

HOTEL 

GEN.  EX 
PENSE 

SAN 

JDAN 

SAN 
PEDRO 

SAN 
MARCOS 

TOTAL 

Lumber,  Materials 

1 

370 

00 

370 

00 

Bolts,  Hoisting 

2 

10 

20 

C.  —  Press,  Gen.  exp. 

11 

15 

00 

Rope,  Con.  Shaft 

" 

36 

60 

6 

80 

Powder,  Materials 

3 

5300 

00 

5300 

00 

Batteries,  Gen.  exp. 

4 

150 

00 

150 

00 

Cots,  Hospital 

5 

30 

00 

30 

00 

Supplies,  Hotel 

6 

155 

00 

155 

00 

Hoist,  Con.  Mach'y 

7 

4520 

00 

4520 

00 

Gen.  exp. 

8 

19 

05 

Sick  benefit 

" 

6 

00 

25 

05 

Frt.  Ch'gs  Materials 

9 

783 

70 

Hoist,  Con.  Mach'y 

" 

2400 

00 

Waste,  Gen.  exp. 

" 

5 

90 

3189 

60 

..     f  Materials 

10 

300 

30 

\  Prospecting 
Develop't 

.. 

45 
420 

00 
00 

Sloping 
Hoisting 
Tramming 
Sampling 

» 

2005 
560 
300 
75 

00 
00 
00 
00 

Transport'n 
Laboratory 
Con.  Shops 

H 

149 
90 
2105 

70 
00 
00 

Mach'y 

" 

1090 

00 

Shaft 

« 

1500 

od 

750 

00 

Tramway 
Gen.  exp. 

11 

173 

46 

1000 

00 

500 

00 

1200 

00 

3200 

00 

14290 

00 

Hoisting 
Con.  Mach'y 
Prospecting 
Develop't 
Sloping 
Hoisting 
Transport'n 
Laboratory 
Shaft 

12 

250 

23 
47 
402 
238 
30 
20 

00 

65 
31 

141 
00; 
00! 
00 

250 
265 

00 
20 

250 

20 

1673 

46 

Tramway 
Materials 

" 

105 

00 

243 

30 

111 

12 

102 

28 

1838 

20 

13 

14 

rata  70%,  15%,  15% 

1189 

95 

832 

07 

178 

49 

178 

49 

6859 

00 

209 

46 

155 

00 

8347 

27 

11514 

81, 

4517 

57 

31603 

11 

52  SIMPLE  MINE  ACCOUNTING 


charged  to  Distribution  No.  4, 
which  is  hoisting.  On  the  same 
bill  is  a  charge  of  $15  for  a  copy- 
ing-press for  the  office,  therefore 
same  is  charged  to  No.  9,  which  is 
General  Expense.  A  manila  rope 
for  the  shaft  at  San  Marcos  Mine 
is  charged  to  Construction  Shaft 
in  the  column  for  San  Marcos. 

(3)  Bill   for   powder   goes   to   Material 

Account. 

(4)  Electric    batteries:    this    is    a    bill 

which  goes  to  "  General  Expense" 
column. 

(5)  Is    a    bill    for    two    stretchers    for 

Hospital  Account. 

(6)  Supplies   for   the   Mess-house;   note 

also  on  the  Debit  side  that  amount 
has  been  received. 

(7)  This  has  already  been  referred  to 

as  bill  received  from  and  paid  for 
by  Boston  office;  see  the  Debit 
entry  for  same. 

(8)  Is  the  total  of  petty-cash  expendi- 

tures for  the  month,  express,  tele- 
grams and  stamps  amounting  to 
$19.05;  goes  to  No.  9,  General 
Expense,  and  the  payment  of  $6 
for  sick  benefit  goes  to  Hospital 
Account. 

(9)  Is  the  total  for  month  of  payments 

to  railroad  and  the  charges  are 
distributed  to  Material  Account, 
Construction  Machinery  Sari 
Pedro  Mine  and  General  Expense. 


SIMPLE  MINE  ACCOUNTING  53 

(10)  Is    a    voucher    covering    the    gross 

amount  of  Pay-roll  after  all  dis- 
tributions have  been  made. 

(11)  Is    the    voucher    for    salaries    and 

wages  of  monthly  employees. 

(12)  Shows  how  all  the  entries  for  ma- 

terials used  are  taken  up.  By 
"  used"  is  meant  all  the  materials 
sold  to  contractors  and  used  by 
the  company  employees. 

(13)  This  is  a  carbon  copy  of  the  bill  made 

out  against  Mendez  e  hi  jo  for 
lumber;  see  Debit  side. 

(14)  Shows   total  sum   of  drafts   drawn 

during  month  which  has  been 
charged  to  cash. 

A  voucher  should  also  be  made  out  for  the  two 
items,  viz.,  $3.25  unclaimed  wages  and  the  75-cent 
refund  which  appears  on  the  Debit  side  of  Cash  Book. 
By  comparing  the  Cash  Book  with  the  Journal  Record 
Book  they  will  be  found  to  agree,  as  both  show  a 
balance  (which  of  course  is  cash)  of  $1175.96.  This 
amount  therefore  is  carried  forward  to  July  1st,  as: 

July  1st.  To  balance  brought  forward $1175.96 

On  the  bottom  line  in  the  Journal  will  be  found  the 
pro  rata  of  the  total  "  General  Expense,"  entered  70  per 
cent  in  the  column  for  San  Juan  and  15  per  cent  each 
to  San  Pedro  and  San  Marcos, 


LEDGER 

In  the  commercial  world  the  Ledger  is  considered 
the  most  important  book.  Except  in  the  matter  of 
condensing  the  accounts  it  would  be  almost  un- 
necessary to  keep  this  book  at  the  mines,  because 
all  the  data  required  is  to  be  found  in  the  Journal. 
However,  for  the  purpose  of  keeping  a  concise  sum- 
mary of  the  different  accounts  a  Ledger  will  be  found 
useful.  Each  mine  should  have  its  own  account, 
starting  from  the  first  payment,  so  that  total  expen- 
diture may  be  ascertained  at  glance.  Entries  should 
be  made  at  end  of  each  month,  taking  same  from  the 
Journal  Record  (see  Fig.  21).  A  similar  account  for 
materials  and  hospital  fund  should  be  kept  (see  Figs. 
22  and  23)  and  a  General  Account  for  the  whole  mines 
(see  Fig.  24). 


55 


56 


Dr. 


SIMPLE  MINE  ACCOUNTING 

Fig.  No.  21 
SAN  JUAN  MINE 


Cr. 


)()7 

1907 

••50 

To  Mat  'Is  pay-roll 

102 

.50 

6 

30 

Operating 

5498 

97 

••' 

Con.  shops 

2105 

00 

- 

Tramway 

743 

30 

Dr. 


SIMPLE  MINE  ACCOUNTING 
Fig.  No.  22 

MATERIAL  ACCOUNT 


57 


Cr. 


)07 

1907 

1 

Balance  on  hand 

6391 

00 

6 

30 

Used 

1869 

88 

30 

Received 

6859 

00 

" 

Balance 

11380 

12 

13250 

00 

13250 

00 

1 

Bal. 

11380 

12 

58 


Dr. 


SIMPLE   MINE  ACCOUNTING 
Fig.  No.  23 

HOSPITAL  FUND 


Cr. 


>07 

1907 

30 

Receipts 

221 

9n 

6 

30 

Disburaements 

209 

46 

" 

Bal. 

12 

49 

221 

95 

1 

Bed. 

12 

49 

• 

Dr. 


SIMPLE  MINE  ACCOUNTING 
Fig.  No.  24 

GENERAL  ACCOUNT 


59 


Cr. 


)07 

1907 

1 

Cash  balance 

752 

09 

6 

30 

San  Juan 

8347 

27 

30 

Boston  office 

29561 

15 

it 

San  Marcos 

4517 

57 

" 

Petty  cash 

4 

00 

" 

San  Pedro 

11514 

81 

« 

San  Juan 

102 

50 

it 

Materials 

6859 

00 

u 

San  Pedro 

75 

00 

(i 

Hospital 

209 

40 

" 

San  Marcos 

37 

50 

" 

Hotel 

155 

00 

It 

Hotel 

155 

00 

" 

Bal. 

1175 

96 

It 

Hospital 

221 

95 

^^^-" 

<( 

Materials 

1869 

88 

_^-—  -""" 

32779 

07 

32779 

07 

1 

Bal. 

1175 

96 

PROFIT  AND  LOSS 

Whilst  the  practical  operation  and  administration 
of  the  mines  does  not  concern  itself  with  the  Treasury 
Finances  of  the  Federal  Mining  Company,  yet  imme- 
diately a  mine  commences  to  produce  ore,  it  is  part  of 
the  superintendent's  duties  to  make  out  a  statement, 
showing  cost  of  production,  transportation  charges, 
treatment  charge  at  the  Smelter,  or,  if  the  ore  is  treated, 
i.e.,  concentrated,  milled,  or  cyanided  on  the  ground, 
the  separate  cost  of  each  operation,  and  then  show 
the  value  of  ore  or  bullion  produced.  According  to 
June  statement  (see  Fig.  21)  San  Juan  operation 
expenses  amounted  to $5498.97 

Less  credits  for  materials  sold 102.50 

or  a  net  cost  of  (excluding  construction 

charges)  5396.47 

The  net  tonnage  from  San  Juan  during  June  was  500, 
making  the  actual  cost  per  ton  in  round  figures  $10.80. 
Where  ore  is  shipped  to  a  custom  smelter  it  is  usually 
a  matter  of  two  or  three  months  before  returns  come 
in;  in  the  meantime  an  approximate  value  is  placed 
upon  the  ore,  based  on  the  mine  sample  and  assays. 
When  Smelter  results  arrive  the  difference  is  taken  up 
in  the  Ledger,  for  or  against  the  company,  at  the  head 
office.  On  Fig.  25  we  have  an  example  of  a  Smelter 
liquidation  sheet.  In  Mexico,  of  course,  there  are  other 
charges,  such  as  Federal  taxes  on  gold  and  silver;  State 
taxes  on  gold,  silver  and  lead,  document  stamps;  etc. 

61 


62 


SIMPLE  MINE  ACCOUNTING 
Fig.  No.  25 


CORRIENTES  SMELTING  COMPANY 

Liq.  No.  1400  CORRIENTES,  Aug.  15,  1907 

IN  FAVOR  OF  FEDERAL  MINING  Co. 

Shippers  Lot  1  Smelter  Lot  1400  Class  Sio.  Pb. 


WEIGHT 

CAR 

SACK 

GROSS 

H-jO 

NET 

QUOTATIONS  AND  PRICES 

7506 

8/15/07 

5238 

Silver              .65  oz.  troy 

6125 

Gold         $19.00   "      " 

3209 

Lead               .05  Ib.  av. 

8650 

Copper 

200000 

2% 

196000 

Assay           Conditions           Quot. 
Gold              0.30  oz.              95%               19.00 
Silver              100  oz.                                          .65 
Lead                 20%               90%                   .05 
Iron                  20%               Unit                   .10 
Lime                 10%                                          .10 

5 

61 
9 
2 
1 

41 

75 
00 
00 
00 

79 

16 

Charges 

Freight  and  Treatment  f.o.b.  Las  Mesas 

16 

00 

Silica                30%               Unit                   .15 

4 

50 

Zinc 

Sulphur 

Arsenic 

20 

50 

Net  value  per  ton 

58 

66 

Exchange  @  200  % 

58 

66 

117 

32 

196000  Ibs.  =  98  tons  @  117.32  =  Mex.  Currency 


$11497.36 


SIMPLE  MINE  ACCOUNTING  63 

Much  more  could  be  written,  but  if  the  writer  has 
made  the  subject  sufficiently  clear  up  to  this  stage,  his 
object  will  have  been  attained,  as  the  more  complex 
problems  of  mine  accounting  may  very  well  be  left  to 
experts  in  the  profession. 


CARD  SYSTEM 

REFERENCE  has  already  been  made  to  forms  used 
in  Material  Account  (see  Figs.  Nos.  14,  15,  and  16). 
Now,  while  it  is  not  necessary  to  let  any  of  the  modern 
ideas  become  a  craze,  yet  a  judicious  application  of 
some  recent  methods  is  not  to  be  despised. 

At  many  of  the  large  operating  mines  to-day,  where 
a  complete  assortment  of  tools,  implements,  and  mate- 
rials is  kept,  the  Card  System  is  used. 

Briefly,  this  may  be  described  by  stating  that  all 
articles  are  listed  alphabetically  on  cards,  commencing 
with  A  and  ending  with  Z. 

At  outlying  properties,  even  though  operations  may 
be,  comparatively  speaking,  on  a  small  scale,  it  is  very 
often  more  economical  to  carry  a  large  stock  of  mate- 
rials, such  as  bolts,  pipes,  valves,  etc :  — 

Where  no  regular  warehouse  staff  is  kept,  such 
articles  would  not  go  into  the  Material  Account,  here- 
tofore detailed  in  this  work,  but  would  be  charged 
direct  out  to  the  mine  or  unit.  Naturally,  all  such 
materials  and  tools  would  be  stored  in  a  special  build- 
ing, under  lock  and  key,  to  which  only  duly  authorized 
persons  have  access. 

This  is  where  a  modified  form  of  the  Card  System 
will  be  found  useful.  The  simplest  form,  no  doubt, 
is  a  strong  loose-leaf  book,  preferably  with  an  outside 
cover  of  aluminum,  size  about  8  in.  by  5  in.,  with  a 
sufficient  supply  of  loose  printed  leaves,  similar  to 

65 


66  SIMPLE  MINE  ACCOUNTING 

Fig.  26.  The  indexing  of  the  leaves,  i.e.,  the  letters 
ABC,  etc.,  can  be  filled  in  at  the  mine. 

Some  letters  will  require  more  sheets  than  others; 
all  that  is  necessary,  therefore,  is  simply  to  add  the 
initial  at  top  of  the  desired  number  of  leaves  and  enter 
them  into  the  loose-leaf  book. 

The  operation,  so  far  as  the  details  of  articles  are 
concerned,  is  explained  on  Fig.  26: 

August  1,  1907 — date  of  opening  the  book —  there 
were  on  hand  50  machine  bolts  f  in.  by  1  in.,  cost  price 
per  100  f.  o.  b.  Las  Mesas,  $2.00  Mexican  currency. 
On  August  5  the  mechanic  sent  in  a  requisition  for 
20  bolts  this  size,  leaving  a  balance  that  date  of  30  in 
the  store. 

As  this  article  is  frequently  called  for  an  order  was 
placed,  amongst  other  things,  on  the  6th  for  100,  upon 
receipt  of  which,  on  August  25th,  entry  was  made  on 
the  slip  in  the  book  as  shown. 

Where  an  extensive  supply  of  materials  and  tools 
is  kept,  it  will  doubtless  prove  more  convenient  to 
adopt  the  Card  System  outright.  This  means  using 
a  printed  card  with  index  letter,  size  and  style  as  may 
be  found  most  convenient,  say  8  in.  by  5  in.,  similar 
to  loose  leaf  already  described,  cards  to  be  alphabet- 
ically arranged  in  a  cabinet  file  in  the  storeroom.  By 
this  method  one  obtains  the  maximum  efficiency  with 
the  minimum  of  labor  in  handling  stores  and  supplies. 


SIMPLE  MINE  ACCOUNTING 

Fig.  No.  26 

FEDERAL   MINING  COMPANY 

STOCK  BOOK 

B 


67 


ARTICLE 

PRICE 
PER 
UNIT 

DATE 

REC'D 

USED 

ON  HAND 

Bolts,  machine,  f  X  1" 

%2.00 

8/1/07 

50 

8/5/07 

20 

30 

• 

8/25/07 

100 

130 

SHIPPING 

WHEN  shipments  of  ores  or  concentrates  are  made 
from  a  mine,  situated  a  long  distance  from  railroad, 
the  freighting  is  done  either  by  pack  animals  or  wagons, 
according  to  the  nature  of  the  country.  Strong  jute 
sacks  are  invariably  employed  and,  where  the  product 
is  high  grade,  the  precaution  is  taken  to  have  mouth 
of  sack  bound  with  flexible  wire  and  sealed  with  lead 
seals. 

A  Way-bill,  similar  to  Fig.  27,  is  made  out  in  trip- 
licate. Each  document  should  be  signed  by  the  ship- 
per and  freighter  and  bear  on  the  face  ORIGINAL, 
DUPLICATE,  TRIPLICATE.  The  original  is  sent  by 
mail  to  receiving  agent  at  point  of  destination,  duplicate 
is  carried  by  freighter  and  the  triplicate  kept  on  file 
at  the  mine,  or  point  of  origin.  This  of  course  has 
reference  to  contracts  made  with  outside  parties  to 
haul  ores  from  mines  to  railroad,  or  merchandise  from 
railroad  to  the  mines. 

It  will  be  noticed  that  payment  is  based  on  "  Net" 
weight  for  the  ore.  By  doing  this  no  opportunity  is 
given  the  freighter  to  indulge  in  any  sharp  practice 
in  the  matter  of  weights.  For  example:  The  gross 
weight  at  mines  was  40,025  Ibs.  There  would  be  noth- 
ing to  hinder  the  freighter  from  taking  advantage  of 
a  good  shower  or  rain,  or  even  sprinkling  the  sacks 
with  water  himself,  thus  adding  two  or  three  tons  to 
his  load,  if  paid  on  delivery  of  gross  weight. 

69 


70 


SIMPLE  MINE  ACCOUNTING 


£ 

o 


"C 

§ 


W 


o  $ 
SP.S 

CO    pC 

£  H 


H 

OQ  ^ 

CO  fe 

<J  > 

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g 
W 


; 


6 


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efl 

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§3 


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SIMPLE  MINE  ACCOUNTING  71 

By  referring  to  Fig.  28  it  will  be  seen  that  the  same 
form  can  be  used  for  the  return  trip,  carrying  merchan- 
dise from  the  railroad  to  the  mines. 

So  far  we  have  dealt  with  the  form  used  by 
freighter,  between  mines  and  railroad.  Upon  arrival 
at  the  railroad  station,  the  forwarding  agent  makes  a 
requisition  for  a  car,  after  loading  which — either  in 
bulk  or  sacks  as  may  be  found  most  convenient  —  a 
Car  Report  is  made  out  (see  Fig.  29) .  Four  copies  are 
made  out  by  the  forwarding  agent,  one  is  mailed  to 
the  Corrientes  Smelter  (this  being  the  destination  of 
the  shipment) ;  one  is  kept  on  file  by  the  freight  agent, 
and  the  other  two  copies,  together  with  Bill-of -lading 
are  sent  to  the  Federal  Mining  Company's  Office. 

Upon  arrival  of  the  documents  at  the  mine,  the 
superintendent  affixes  a  rubber  stamp,  provided  for 
the  purpose  (see  Fig.  29),  showing  mine  assays  and 
analysis  of  this  shipment. 

These  data  are  also  entered  on  the  duplicate  report 
to  be  filed  in  the  office.  The  original  Car  Report  and 
Bill-of-lading  are  sent  to  the  representative  of  the 
Federal  Mining  Company,  at  Corrientes,  who  is  to 
watch  the  weighing  and  sampling  at  the  Smelter. 

It  is  customary  to  give  standing  instructions  in 
writing  to  the  mine  representative  at  the  Smelter, 
regarding  the  weighing,  sampling  and  assaying  of  ores. 

In  some  instances  a  margin  of  2  per  cent  would  be 
allowed,  on  which  a  basis  of  settlement  is  arranged 
with  the  Smelter.  For  example:  Car  Report  (Fig. 
29)  shows  silver  105  ozs.,  the  Smelter  reports  101 
ozs.,  difference  of  4  ozs. 

By  allowing  a  margin  of  2  per  cent  the  settlement 
assay  would  be  the  split  assay  of  103  ozs.,  which  is 
accepted  by  the  Smelter.  The  same  process  is  gone 


72 


SIMPLE  MINE  ACCOUNTING 


p 

h— I 

^ 


w 

Q 
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SIMPLE   MINE   ACCOUNTING 


73 


Fig.  No.  29 
SHIPPING  ADVICE   NO- 


FEDERAL  MINING  COMPANY 

LAS  MESAS,  Aug.  5,  1907 

We  have  this  date  shipped  to  the  Corrientes  Smelter,  through  our 
Representative  Mr.  H.  Perlersen,  the  following: 


CAR 

SACKS 

MARKS 

DESCRIPTION 

WEIGHT 
LBS. 

REMARKS 

C.M.  7506 

300 

F.  M.  C. 

Ore 

40025 

Lot  incomplete. 

Empty    sacks    to    be 

returned    at    once 

to  Federal  Mining 

Co.,  Las  Mesas. 

H20 

2% 

Au  0.30 

Ag  105 

Pb  21% 

Cu. 

SiO  30% 

Fe  20% 

CaO  12% 

FEDERAL   MINING  COMPANY, 

ROBT.  LESTER,  Supt. 


74  SIMPLE  MINE  ACCOUNTING 

through  with  all  the  assays  and  analysis.  Where 
the  discrepancy  is  too  great  between  Mine  and  Smelter, 
the  request  is  made  for  resampling  the  lot.  Should 
this  repetition  still  show  results  considerably  below 
mine  assays,  then  Smelter  sample  (a  portion  of  which 
is  always  set  aside  for  the  purpose)  is  sent  to  an  inde- 
pendent assayer,  agreed  upon  by  both  parties,  for 
umpire. 


MONTHLY  COST  AND  PROFITS 

FOR  the  guidance  of  the  officials  at  headquarters, 
and  also  that  of  the  superintendent  at  the  mine,  a 
comparative  cumulative  statement  should  be  made 
out  at  the  end  of  each  month,  similar  to  Fig.  31,  show- 
ing cost  of  operations  and  value  of  ore  produced,  based 
upon  mine  assays. 

Value  and  cost  per  ton  will,  naturally,  vary  one 
month  from  another.  The  former  may  result  from  dif- 
ference in  assays  or  be  due  to  fluctuations  in  price 
of  silver  or  lead. 

Variation  in  costs  may  be  due  to  heavy  prospect- 
ing or  extra  development  charges,  which  charges 
properly  belong  to  mining  costs  in  a  producing,  pay- 
able mine. 

The  object  of  the  statement  is  really  to  show  at  a 
glance  what  has  been  done  during  the  month  and  how 
it  compares  with  previous  months. 

To  obtain  value  of  ore  produced  on  Fig.  30 : 

2000  tons  in  20  lots  of  100  tons  each. 
Add  the  assays  and  analysis  of  20  lots. 
Divide  sum  by  number  of  tons. 
Will  give  the  average  of  total  tonnage. 

Taking  the  figures  as  shown  on  Fig.  30,  we  have : 

Gold      1.50     oz.    less    5%=    1.425   at       $19.00 $27.07 

Silver  91.7        "       "      5%  =  87.1         "  .60 5.23 

Lead        10%  "    10%=      9%  per  Ib.       .04 7.20 

Iron  5%  "    unit    .10 50 

Lime          5%  "      "       .10 .50 

$40.50 
75 


76 


SIMPLE  MINE  ACCOUNTING 


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SIMPLE   MINE   ACCOUNTING  77 

The  costs  are  obtained  from  the  records  at  the  mine, 
so  far  as  administration,  mining  and  part  of  the  trans- 
portation charges  are  concerned. 

The  Smelter  charge  is  fixed  on  what  is  called  a 
neutral  basis,  i.e.,  irrespective  of  the  analysis. 

Fig.  30  shows  Smelter  charge  of  $10.00,  which  is 
made  up  as  follows:- 

Treatment  charge  at  smelter $  5.00 

Silicia  60%  at  10  cents  per  unit 6.00 

$11.00 
Less  deduction  for  10%  lead 1.00 

$10.00 

The  rule  is  for  Smelters  to  quote  a  freight  and  treat- 
ment rate  f .  o.  b.  cars  railroad  shipping  point.  In  the 
present  instance,  however,  the  freight  charge  is  in- 
cluded in  the  cost  of  transportation. 

The  allocation  of  costs  need  not  necessarily  be  made 
exactly  as  shown  on  Fig.  30,  but  certain  divisions  should 
be  made  in  order  that,  where  extraordinary  expenses 
are  encountered,  one  may  be  able  to  ascertain  in  what 
department  the  increased  cost  occurred. 

Under  the  head  of  Administration  is  grouped  the 
expenses  of  general  supervision,  office  staff,  and  inci- 
dental surface  work.  Under  Mining,  all  expenses  of 
prospecting,  development,  hoisting,  tramming,  stoping, 
etc. 

Under  Transportation,  all  wagon  freights,  sacks, 
salary  of  forwarding  agent,  commission  of  represent- 
ative, railroad  freight,  etc.  Under  Taxes,  all  Municipal, 
State  and  Federal  taxes,  whether  in  form  of  assessment 
on  the  ore  produced,  bullion  or  coinage  charges. 

If  milling,  concentrating,  or  cyaniding  is  done  at 
the  mine,  costs  of  same  can  be  entered  in  separate 
columns.  The  printed  form  gives  all  the  months  of 


78  SIMPLE   MINE  ACCOUNTING 

the  year.  If  for  any  reason,  such  as  a  "cave-in"  or 
"break-down"  of  machinery,  any  particular  month 
shows  an  actual  loss,  same  could  be  shown  in  red  ink 
in  the  last  column.  By  adding  the  amounts  in  profit 
column,  at  end  of  December,  one  has  the  whole  opera- 
tions for  the  year. 


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